Joseph Geunes, Yasemin Merzifonluoğlu, H. Edwin Romeijn
Capacitated procurement planning with price-sensitive demand and general concave revenue functions
This paper develops effective solution methods for discrete-time, finite-horizon procurement
planning problems with economies of scale in procurement, price-sensitive demand, and timeinvariant
procurement capacities. Our models consider general concave revenue functions in
each time period, and seek to maximize total revenue less procurement and inventory holding
costs. We consider the case in which prices may vary dynamically, as well the case in which a
constant price is required during the planning horizon. Under mild conditions on the revenue
function properties, we provide polynomial-time solution methods for this problem class.